Raymond Corporation v. National Union Fire Insurance Company of Pittsburgh, Pennsylvania

• Decision Date: 27 December 2007
• Docket Number: 502467.,501213.
• Citation: 46 A.D.3d 1251,849 N.Y.S.2d 101,2007 NY Slip Op 10425
• Parties: RAYMOND CORPORATION et al., Appellants, v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA, Respondent.
• Court: New York Supreme Court — Appellate Division

46 A.D.3d 1251

849 N.Y.S.2d 101

2007 NY Slip Op 10425

RAYMOND CORPORATION et al., Appellants, v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA, Respondent.

501213.

502467.

Appellate Division of the Supreme Court of the State of New York, Third Department.

Decided December 27, 2007.

Appeals (1) from a judgment of the Supreme Court (Dowd, J.), entered June 30, 2006 in Chenango County, upon a decision of the court in favor of defendant, and (2) from an order of said court, entered April 9, 2007, in Chenango County, which, among other things, denied plaintiffs' motion to vacate the judgment.

Mugglin, J.

Plaintiff Raymond Corporation contributed $500,000 and defendant contributed $2.5 million toward a $6 million settlement^* of a personal injury accident, stipulating to resolve an insurance coverage issue in subsequent litigation or arbitration. When that subsequent litigation was previously before us, we reversed Supreme Court's November 5, 2002 order granting summary judgment to defendant and declared that the policy at issue covered Raymond's vendor, as an additional insured, only for injury arising out of defects in Raymond's products (6 AD3d 788 [2004]). Our interpretation—that the policy language covered personal injury claims caused by the vendor's independent acts of negligence—was reversed by the Court of Appeals (5 NY3d 157 [2005]) and Supreme Court's order was reinstated.

Thereafter, in October 2005, defendant submitted a notice of settlement of judgment and notice of taxation of costs, including predecision interest. Supreme Court rejected plaintiffs' opposition to the proposed judgment, issuing a "memorandum decision" on June 22, 2006. On June 30, 2006, final judgment was entered awarding defendant $2.5 million with predecision interest of $895,625 and postdecision interest of $1,118,858.44. Thereafter, plaintiffs moved to vacate the final judgment claiming that the judgment was obtained as a result of defendant's misconduct during discovery and requesting additional discovery based on newly discovered evidence. Supreme Court denied plaintiffs' motion to vacate the final judgment. Plaintiffs now appeal from Supreme Court's "memorandum decision" entered June 22, 2006, the final judgment entered June 30, 2006 and the denial of the motion to vacate the final judgment. The appeals were consolidated by order of this Court.

We first address defendant's assertions that neither the "memorandum decision" nor the final judgment entered herein constitute appealable paper and, thus, these appeals should be summarily dismissed (see CPLR 5512 [a]; Matter of Palmer v Palmer, 284 AD2d 612, 613 [2001]). An appealable paper is an order or judgment of the court of original instance (see CPLR 5512 [a]; Thorne v Grubman, 14 AD3d 433, 434 [2005]). First, although the document entered June 22, 2006 is styled "memorandum decision," the foot of the decision refers to the papers considered and states "the signing of this decision and order shall not constitute entry or filing under CPLR 2220." Although the paper has aspects of an order, since it is not based on a notice of motion seeking specific relief, we conclude that the document does not constitute an appealable order. Second, the final judgment entered in response to the "memorandum decision" is an appealable paper since it addresses the issue of entitlement to predecision and postdecision interest, a heretofore unlitigated issue.

We next address plaintiffs' appellate arguments that the judgment must be vacated due to newly discovered evidence (see CPLR 5015 [a] [2]) and because of alleged misconduct on the part of defendant (see CPLR 5015 [a] [3]). Although we reject defendant's position that plaintiffs should be sanctioned for frivolous conduct as a result of these arguments, we nevertheless find them unpersuasive. Plaintiffs' arguments are premised on their assertion that the Court of Appeals engaged in an economic justification—that a vendor's endorsement is a "cheap add-on" in denying coverage and, therefore, defendant's destruction of its files containing the cost of this vendor add-on and plaintiffs' "newly discovered" evidence of the cost of this add-on support vacating the judgment. In our view, a fair and balanced reading of the Court of Appeals decision reveals that it is based on an analysis of the language of the policy, not economic principles. Therefore, earlier discovery of the cost of the vendor endorsement to Raymond would have had no impact on the final determination of this issue. Although this determination renders plaintiffs' additional arguments largely irrelevant, we do observe that we find no abuse of Supreme Court's discretion in denying plaintiffs' motion to vacate the final judgment because of defendant's misconduct or because of newly discovered evidence (see Woodson v Mendon Leasing Corp., 100 NY2d 62, 68 [2003]). In any event, as the relevant invoices were at all times in Raymond's own files, there is no merit to the argument that defendant committed misconduct—i.e., spoliation of evidence —by destroying its copies of the invoices or that the evidence constitutes newly discovered evidence (see Tibbits v Verizon N.Y., Inc., 40 AD3d 1300, 1302 [2007]; People v Tucker, 40 AD3d 1213, 1214 [2007], lv denied 9 NY3d 882 [2007]; Evergreen Bank v Dashnaw, 262 AD2d 737, 738 [1999]).

We next address plaintiffs' argument that the inclusion of over $2 million in prejudgment interest is unsupportable in law and contrary to the parties' stipulation, and defendant's argument that this issue is unpreserved for appellate review because plaintiffs served no reply to its answer, which sought $2.5 million plus interest,...